Dan Ariely on the Truth About Dishonesty, Animated

"Under what circumstances would you lie, or cheat, and what effect does your deception have on society at large? Dan Ariely, one of the world's leading voices on human motivation and behaviour is the latest big thinker to get the RSA Animate treatment.

The Test, example of visual illusions

The relationship between preferences and actions. (a) the view from neo-classical economics, in which a calculation of hedonic utility underlies behavior. In this view, preferences cause actions and actions reveal preferences. (b) captures the authors’ account, where behavior is driven by hedonic utility AND by situational factors, causing individuals to erroneously infer stable preferences from their actions.Later behavior is also driven in part by biased memories for these inferred…

It's become increasingly obvious that the dismal science of economics is not as firmly grounded in actual behavior as was once supposed. In "Predictably Irrational," Dan Ariely tells us why.

If we only have money in the equation then it is not as valuable because then it is all about opportunity cost. The representation of e.g. a cup of cappuccino is higher than $3. Thus, we can take that money and make it specific, concrete - make it less valuable from an economic perspective but yet give it a higher perceived value. By doing this, you can change how people make decisions. ($1000 panasonic vs $700sony, $1000 sony incl cds for $300)

Behavioral economics and the closely related field of behavioral finance couple scientific research on the psychology of decision making with economic theory.

2. Brief brand exposures: exposure to a brand can have unconsious positive effects. (exposure to Apple could do us more creative than exposure to IBM, wearing the same jacket as Michael Phelps could make us swim faster). I.e. surrounding yourself with certain things can thus affect your performance. A successful strategic user thinks of this.